Library | ESG issues
Systemic Risk Management
Systemic risk refers to the possibility that an event at the company level could trigger severe instability or collapse in an entire industry or economy. It extends beyond individual failures, encompassing large-scale threats such as climate change, natural disasters, inflation, geopolitical crises, and pandemics. Effective systemic risk management requires proactive monitoring, regulatory safeguards, and resilience strategies to mitigate risks and ensure financial stability in an increasingly complex and uncertain global landscape.
Refine
175 results
REFINE
SHOW: 16
The third, systems stage of corporate governance: Why institutional investors need to move beyond modern portfolio theory
The authors of this paper argue that institutional investors need to move beyond Modern Portfolio Theory (MPT), and consider a wider risk management strategy. The paper outlines the potential failings of MPT and suggests ways for institutional investors to better align with the needs of society and the economy.
Catalysing bank climate action: Lessons from the inside
This report shares insights from the Climate Safe Lending Fellowship, a programme for banking professionals committed to accelerating the decarbonisation of their institutions. The report offers practical approaches and tools used by climate intrapreneurs to help their banks transition toward climate-safe banking.
The TNFD nature-related risk and opportunity management and disclosure framework: Beta v0.1 release
The Taskforce on Nature-related Financial Disclosures (TNFD) has released a beta version of its Nature-related Risk and Opportunity Management and Disclosure Framework. The framework aims to deliver a risk management and disclosure framework for organisations to report and act on evolving nature-related risks and opportunities.
Investor primer to transition risk analysis
This report focuses on scenario analysis as a tool for assessing climate and energy transition risks that traditional financial analysis may not capture. It gives insight into the conceptual and methodological underpinnings of scenario analysis, drawing on models from The CO-Firm and KECH climate research.
A toolbox of sustainable crisis response measures for central banks and supervisors – second edition: Lessons from practice
This report is a toolbox of options for central banks and supervisors to align crisis response measures with climate and sustainability objectives. The second edition includes an extended analysis of sustainability-linked measures. It also highlights the importance of moving from voluntary to mandatory environmental reporting and recommends efficient disclosure to regulated financial institutions.
Connecting the dots: Energy transition scenarios and credit quality
This report explores the implications of climate transition scenarios for the credit quality of nine companies in power utilities, cement, and steel. It shows the potential credit consequences of failing to mitigate risks and grasp opportunities associated with the low-carbon transition. The study highlights the value of granular scenario analysis for investors.
Welcome to the great unravelling: Navigating the polycrisis of environmental and social breakdown
This report examines the ongoing crises of environmental and social breakdown, exploring their interconnected drivers and feedbacks. It offers pragmatic and personal solutions, challenging the myth of progress, and suggesting thoughtful change as the only hope for navigating this uncertain future.
Physical risk framework: Understanding the impacts of climate change on real estate lending and investment portfolios
This report provides lenders and investors with a four-step process to assess the physical impact of climate change on their real estate and infrastructure portfolios. The report emphasises the importance of using insurers’ extreme weather models within this framework to estimate natural catastrophe risks.
Intangible cultural heritage, diverse knowledge systems, and climate change
This paper explores the relationship between climate change, different knowledge systems, culture, and heritage. It discusses the importance of a historical perspective, defines and describes different knowledge systems, and addresses the limitations of the predominant scientific approach. It also presents a framework for collaboration among plural knowledge systems.
Putting pandemics behind us: Investing in one health to reduce risks of emerging infectious diseases
This report discusses One Health, an approach that recognises the interdependent nature of human, animal, and environmental health. It presents an investment framework designed to mobilise finance for pandemic prevention and reduce the risks of emerging infectious diseases.
Are corporate biodiversity commitments consistent with delivering ‘nature-positive’ outcomes? A review of ‘nature-positive’ definitions, company progress and challenges
This article examine the emerging trend of "nature-positive" in business and large corporations. The authors propose key criteria to distinguish 'nature-positive' approaches from previous iterations, analyse company sustainability reports, and examine progress from 2016 to 2021.
Guiding principles for responsible investment stewardship in Aotearoa New Zealand
The Stewardship Code is a voluntary guideline crafted by New Zealand industry experts, aiding financial market participants in responsible investment stewardship. Comprising nine principles, it supplements regulatory mandates, allowing voluntary adoption and reporting on a 'comply or explain' basis.
Systemic interventions for decarbonisation: The business perspective
This report advocates for a systemic approach to accelerate rapid decarbonisation, positioning innovative businesses to win from driving such an approach. The report evaluates the associated theoretical high-level insights in the case of the decarbonisation of the light road transport sector, proposing a set of principles for decarbonisation and mindset shifts for business innovators and incumbents.
The nature-based economy: How Australia’s prosperity depends on nature
This report highlights the link between nature and economic productivity in Australia. The report illustrates that approximately half of Australia’s GDP is directly dependent on specific ecosystem services derived from natural capital. The report sets out recommendations for action to halt and reverse the decline of nature in order to create a Nature Positive future.
Global assessment report on disaster risk reduction - our world at risk: Transforming governance for a resilient future
The report explores the challenges faced in managing systemic risk, the complexity of decision-making in volatile situations and offers solutions for improving risk communication.
Financial crime compliance to fight modern slavery and human trafficking
This blueprint urges financial institutions to tackle human trafficking and modern slavery, suggesting that both are a financial crime and compliance risk, and warns against wholesale de-risking. This report outlines strategies for detecting financing of such illegal activities, reducing risk, and government action towards AML/CFT risk assessments, ahead of regulatory fines and sanctions in jurisdictions worldwide.
